Page:The Bank of England and the State, 1905.djvu/52

 market remains the cheapest in the world—I look upon the present abnormal position as merely temporary—so long shall we be able to take from foreign nations and our own Colonies the loans they may have to place for the development of their own countries; and the increase of our export trade to these countries will follow as a natural result. When the railways of the United States and of Argentina were built, mostly with British capital, we also sent the material to build them with. When the Japanese indemnity was paid over here, the proceeds went to Japan in the shape of warships, built in our yards.

The importance of our remaining the principal market for foreign investments of all kinds cannot be overrated, and I shall refer to this point again when we come to consider the question of balance of trade, perhaps the most difficult question we have to deal with to-night, and one of the most important, in considering Foreign Trade and the Money Market. For it is only through the action of the money market that this balance of trade adjusts itself. I must admit that I have, for some years past, looked upon the rapidly-growing adverse balance with a certain feeling of uneasiness. I subjoin a table taken from the official figures showing the movement of trade, subdivided under various headings (starting from 1885, because the income from foreign investments before that year was made out on a different system).